Rabobank certificates to trade as cooperative bank lures investors

AMSTERDAM Tue Dec 3, 2013 3:56am EST

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AMSTERDAM Dec 3 (Reuters) - Rabobank, recently fined $1 billion for rigging benchmark interest rates, will list about 5.9 billion euros ($8 billion) worth of privately-held certificates on the Euronext exchange to attract more investors, an executive said on Tuesday.

The certificates are currently held by the Dutch lender's member banks, some of which have traded in their holdings in anger over the Libor scandal.

The listing next month of the certificates will open up ownership to institutional investors such as pension funds, introduce market pricing, and enable existing investors to trade their holdings, said Bert Bruggink, chief financial officer.

"This is partly intended to offer the certificates to institutional investors to create more depth and liquidity in the market," he said.

The listing will initially cover the outstanding 5.9 billion euros worth of certificates, Bruggink said.

"We will decide later on if there are reasons to increase that," he added.

The Libor scandal not only led to huge fines by regulators but also damaged trust in Rabobank by Dutch customers, already disillusioned by the bailouts of the country's biggest banks, ABN Amro and ING Groep, during the financial crisis.

Rabobank's chief executive resigned and the head of international wholesale banking was forced to leave over the Libor scandal.

Rabobank began offering its members the option to sell back certificates last year and has since withdrawn about 1 billion euros worth, Bruggink said.

The listing is expected to attract institutional investors, mainly Dutch pension funds interested in inflation protection, he said.

The certificates, in the form of preferred, subordinated bonds, are currently held only by clients and members of Rabobank, once one of the most trusted lenders in the country with a long history in the agricultural sector.

($1 = 0.7377 euros) (Reporting By Anthony Deutsch; Editing by Sara Webb and Mark Potter)

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